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FORECLOSURE VICTIMS FACE AID DEADLINE

Aid for foreclosure victims available, but deadline looms

Florida Attorney General Pam Bondi has been holding news conferences around the state, trying to get the word out that money is available for people who were caught up in the "robo-signing" foreclosure scandal.

Published: Monday, February 11, 2013 at 1:00 a.m.

Last Modified: Saturday, February 9, 2013 at 4:31 p.m.

Florida has millions of dollars to dole out to foreclosed homeowners who became ensnared in the infamous "robo-signing" scandal.

Facts

FOR MORE INFORMATION

Consumers can learn more about the agreement and their eligibility at www.nationalmortgagesettlement.com or by calling ((866) 430-8358.

But there's a slight problem: only about half the homeowners who are eligible have filed claims for the money, and the deadline is Friday.

The original deadline was Jan. 18, but the Florida Attorney General's office moved it to allow more people a chance to participate.

The money is part of the $25 billion national mortgage settlement among five of the nation's largest lenders and 49 states over foreclosure abuses.

Florida's share of the settlement will total $8.4 billion. Most of that amount, $7.6 billion, will come in loan modifications, including principal relief or reductions, which some say could help re-energize the state's real estate market at a time when Florida leads the nation in foreclosures.

Another $170 million is available in payments to Florida borrowers who lost their homes to foreclosure between Jan. 1, 2008, and Dec. 31, 2011. Attorney General Pam Bondi says more than 167,000 borrowers might be eligible for those payments.

But so far, a little less than six in 10 of them have submitted claims. Bondi has held press conferences around the state -- most recently in Tampa -- to encourage those eligible to apply.

Those homeowners should have received letters from the Attorney General's Office in recent months. The office also started a telephone campaign several weeks ago, said John Lucas, a spokesman in Bondi's office.

"We pushed the deadline because we are trying to get more numbers," Lucas said. "The firm that is processing the claims said it could continue to take them while processing the ones already filed."

Lucas had no ideas on why the foreclosed homeowners may not be filing claims.

Most of them will receive several thousand dollars, a welcome amount but, to some, hardly enough to compensate for the loss of their homes.

The five banks -- Ally/GMAC, Bank of America, Citi, Chase and Wells Fargo -- were key players in the robo-signing of foreclosure documents. They processed foreclosures without verifying documents and committed other abuses during the financial crisis, when home values plunged and millions lost their homes.

Some chalk up the lukewarm response to "borrower fatigue" -- homeowners who have been through so much that they have simply thrown in the towel.

Drew Peterson, a specialist in distressed property with the Re/Max Alliance Group in Sarasota, said there also is skepticism about the settlements.

"In my experience, a certain percentage will take advantage of that, but a larger percentage either doesn't know it's there, assume they won't qualify, or they get into the process and give up," he said.

"Some people aren't willing to go through another program that has more paperwork than the last one," he said.

The lenders also could be an issue. The monitor of the national settlement reported in November that 303 Floridians had filed complaints over problems they were having with their claims.

In that report, the monitor said the five banks had so far provided $3.6 billion in mortgage relief to Florida homeowners, between March 1 and Sept. 30.

Nearly 49,000 underwater Florida homeowners benefited from short sales, loan forgiveness, loan modifications and other actions under the settlement, the largest financial recovery by attorneys general since the landmark 1998 tobacco litigation.

That worked out to an average of $73,663 per homeowner in the state. Most of the relief has come through short sales, in which lenders agree to accept less than what the seller owes on the mortgage. The banks forgave $2.2 billion in debt through short sales to 19,673 homeowners, an average of $111,853 per sale.

Bank of America is on the hook for the largest amount of consumer relief, at $8.58 billion. So far in Florida, the state's largest bank -- and No. 2 nationwide -- has provided nearly $2 billion, more than half of it in the form of completed short sales.

<p>Florida has millions of dollars to dole out to foreclosed homeowners who became ensnared in the infamous "robo-signing" scandal.</p><p>But there's a slight problem: only about half the homeowners who are eligible have filed claims for the money, and the deadline is Friday.</p><p>The original deadline was Jan. 18, but the Florida Attorney General's office moved it to allow more people a chance to participate.</p><p>The money is part of the $25 billion national mortgage settlement among five of the nation's largest lenders and 49 states over foreclosure abuses.</p><p>Florida's share of the settlement will total $8.4 billion. Most of that amount, $7.6 billion, will come in loan modifications, including principal relief or reductions, which some say could help re-energize the state's real estate market at a time when Florida leads the nation in foreclosures.</p><p>Another $170 million is available in payments to Florida borrowers who lost their homes to foreclosure between Jan. 1, 2008, and Dec. 31, 2011. Attorney General Pam Bondi says more than 167,000 borrowers might be eligible for those payments.</p><p>But so far, a little less than six in 10 of them have submitted claims. Bondi has held press conferences around the state -- most recently in Tampa -- to encourage those eligible to apply.</p><p>Those homeowners should have received letters from the Attorney General's Office in recent months. The office also started a telephone campaign several weeks ago, said John Lucas, a spokesman in Bondi's office.</p><p>"We pushed the deadline because we are trying to get more numbers," Lucas said. "The firm that is processing the claims said it could continue to take them while processing the ones already filed."</p><p>Lucas had no ideas on why the foreclosed homeowners may not be filing claims.</p><p>Most of them will receive several thousand dollars, a welcome amount but, to some, hardly enough to compensate for the loss of their homes.</p><p>The five banks -- Ally/GMAC, Bank of America, Citi, Chase and Wells Fargo -- were key players in the robo-signing of foreclosure documents. They processed foreclosures without verifying documents and committed other abuses during the financial crisis, when home values plunged and millions lost their homes.</p><p>Some chalk up the lukewarm response to "borrower fatigue" -- homeowners who have been through so much that they have simply thrown in the towel.</p><p>Drew Peterson, a specialist in distressed property with the Re/Max Alliance Group in Sarasota, said there also is skepticism about the settlements.</p><p>"In my experience, a certain percentage will take advantage of that, but a larger percentage either doesn't know it's there, assume they won't qualify, or they get into the process and give up," he said.</p><p>"Some people aren't willing to go through another program that has more paperwork than the last one," he said.</p><p>The lenders also could be an issue. The monitor of the national settlement reported in November that 303 Floridians had filed complaints over problems they were having with their claims.</p><p>In that report, the monitor said the five banks had so far provided $3.6 billion in mortgage relief to Florida homeowners, between March 1 and Sept. 30.</p><p>Nearly 49,000 underwater Florida homeowners benefited from short sales, loan forgiveness, loan modifications and other actions under the settlement, the largest financial recovery by attorneys general since the landmark 1998 tobacco litigation.</p><p>That worked out to an average of $73,663 per homeowner in the state. Most of the relief has come through short sales, in which lenders agree to accept less than what the seller owes on the mortgage. The banks forgave $2.2 billion in debt through short sales to 19,673 homeowners, an average of $111,853 per sale.</p><p>Bank of America is on the hook for the largest amount of consumer relief, at $8.58 billion. So far in Florida, the state's largest bank -- and No. 2 nationwide -- has provided nearly $2 billion, more than half of it in the form of completed short sales.</p>